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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: techreports who wrote (51273)	5/7/2002 1:59:13 PM
From: EnricoPalazzo	Respond to of 54805

Just because the stock is down, doesn't mean the shorts were right. The shorts were saying RMBS was a goner company. The company is still here and doing fairly well. They were wrong. The reason the stock is down is because of the overall market. The shorts were saying that the stock was going down. The stock went down. Q.E.D. As for why the stock went down, well before stating that it's because of the overall market, you might want to look at this: finance.yahoo.com^ixic&a=v&p=s&t=2y&l=on&z=m&q=l If you move that chart up a few months, it gets much worse. As for the question of whether RMBS the company is stronger now than it was two years ago, we'll just have to agree to disagree. In my opinion, the writing is on the wall, and has been for at least 6 months. The shorts just saw it sooner than I did. You seem to be getting very upset about this, and even accuse me of lacking empirical data. I don't know what empirical data to provide you with other than what I've given you--RMBS's awful returns over the past several years. The fact that it went into the stratosphere before falling back to earth means very little to me. Same thing happened with ICGE, but that too was a long-term dud. Usually, when some one is this emotional about a stock, that's a bad sign. Ethan

To: techreports who wrote (51273)	5/7/2002 2:13:09 PM
From: Mike Buckley	Respond to of 54805

techreports, Rambus's fundamentals have improved I don't follow Rambus, but in most circumstances a company's improved or deteriorated fundamentals usually become manifested in metrics such as revenue, operating margins, free cash flow as a percentage of revenue, return on invested capital, etc. Since you and Ethan are disagreeing on that issue, it might be helpful to take a look at those metrics over the last couple of years as an indicator of the quality of the fundamentals. Frankly, my guess is that it's very difficult to find high-tech companies whose core business is selling to companies that have clearly improved fundamentals over a couple years ago. I wouldn't want that to be confused with competitive advantage. It's very possible, even probable, that a leading company will have stronger competitive advantages now than two years ago despite the sort of deteriorating fundamentals that can be measured using the metrics I described above. --Mike Buckley

To: techreports who wrote (51273)	5/7/2002 2:15:41 PM
From: tinkershaw	Respond to of 54805

It went from $90 to $400 you know. So were the shorts right? I doubt the shorts did pretty well as you said. I'd probably guess most of them lost money It was the biggest short killing of the decade I'd have to say. And it was thoroughly predictable from the news coming out. I have seen so much evidence that the efficient market theory is bunk, it is incredible. The efficient market theory basically states that you can't beat the market through information (absent inside information) because any information you have is priced into the stock almost immediately. In the middle of December of 1999 it became very obvious that INTC was not abandoning RDRAM, that the 820 was coming out, that Samsung was ramping, and that collateral suppliers, who could not otherwise afford to produce RDRAM materials, unless it was a sure thing, were producing to support the 820 and RDRAM. It took about 2 months for this information to seep into the stock price. Just last week GMST news about an ITC Staff Attorney's brief seemed to crash GMST by about 15%. That news had been discussed on Yahoo! for days, and in fact was the topic of several brokerage reports at least 30 days prior. Yet, only after it hit the Wall Street Journal did it have any affect on stock price! In the end, the shorts were hopelessly wrong about RMBS in 1999 and 2000, yet the longs were hopelessly wrong about the state of the DRAM market in 2001. What can be derived from this is that shorts are no more predictive than longs in anticipating the price moves of stock. They just increase the volatility and momentum of a stock one way or the other. Are the shorts wrong this time? Shorts are playing a very dangerous game here. If RMBS prevails in one of the pending lawsuits in Europe (and there is no way anyone can predict this with better than 50/50 chance - and RMBS has already received a positive court appointed expert opinion - albeit ignored by the initial judge in Italy) the stock is likely to start rising; similarly, if RMBS wins anything material on appeal with Infineon, the stock is likely to rise. On the other hand, RDRAM continues to be relegated to the high-end of the marketplace, and it is now looking like, despite price/performance benefits at 2 ghz and above, that it won't be until 3 ghz become the norm that the industry pain will be so great that RDRAM will have to be moved into the mainstream. Assuming DDR-II does not arrive by then (and DDR-II is troublesome). So in the end, stop looking for Gorilla here. It is still all speculation and probably less fit for the Gorilla Board where the developments of the ARMHY & BEAS story are probably more germane to the discussion. Tinker P.S. Then again, the above mentioned pain at 3 ghz (even though 2 ghz proved to be the proper threshold for price/performance as predicted) is good discussion topic in analyzing the TALC for RDRAM, as is the on-gong litigation, but the litigation is too unpredictable for true Gorilla Gaming, other than very speculative, high-risk gaming of the advanced variety. But massive shorting? About as predictive as massive longing.